Session 2014 - 15
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Other Bills before Parliament


 
 

Public Bill Committee:                               

148

 

, continued

 
 

Steve Webb

 

That Schedule 1 be transferred to the end of line 29 on page 32

 

Member’s explanatory statement

 

The Bill needs restructuring in light of the proposed Government amendments. There are a number

 

of motions to transfer provisions around. Collectively they are designed to move Part 2 of the Bill

 

to after Part 3 and to move clause 8 and Schedule 1 to the end of what is currently Part 2.

 

Steve Webb

 

Clause  9,  page  4,  line  36,  leave out paragraph (b)

 

Member’s explanatory statement

 

This amendment removes the power to confer functions on a specified person in connection with

 

the enforcement of regulations made under clause 9. This is because there are existing powers that

 

are considered sufficient and appropriate to deal with enforcement in relation to any breaches of

 

those regulations.

 

Steve Webb

 

Clause  9,  page  4,  line  43,  at end insert—

 

““trustees or managers” means—

 

(a)    

in relation to a scheme established under a trust, the trustees, and

 

(b)    

in relation to any other scheme, the managers.”

 

Member’s explanatory statement

 

This amendment inserts a definition of “trustees or managers” to clarify that regulations made

 

under clause 9 may impose obligations on trustees in the context of a trust-based scheme, and on

 

managers in the context of a scheme not established under trust.

 

Steve Webb

 

Clause  11,  page  5,  line  42,  leave out “non-salary related benefit,”.” and insert

 

“benefit falling within subsection (1A),”;

 

(b)    

after subsection (1) insert—

 

“(1A)    

The following fall within this subsection—

 

(a)    

collective benefits;

 

(b)    

benefits calculated otherwise than by reference to the

 

member’s salary.””

 

Member’s explanatory statement

 

This amendment makes it clear that collective benefits are subject to the 30 day preservation rule

 

for the purposes of obtaining short service benefit.

 

Steve Webb

 

Clause  11,  page  6,  line  15,  leave out paragraph (c)

 

Member’s explanatory statement

 

This is consequential on amendment 9.


 
 

Public Bill Committee:                               

149

 

, continued

 
 

Steve Webb

 

Clause  11,  page  6,  line  47,  at end insert—

 

“( )    

In section 74 (computation of short service benefit), in subsections (3) and (4),

 

after “so much of any benefit” insert “, other than collective benefit,”.”

 

Member’s explanatory statement

 

As a general rule schemes are required to provide for short service benefits to be computed on the

 

same basis as long service benefit. In cases where this doesn‘t apply benefits are subject to a

 

uniform accrual rule. This amendment ensures collective benefits will not be subject to the uniform

 

accrual requirements

 

Steve Webb

 

Schedule  2,  page  26,  line  12,  at end insert—

 

“( )    

Where this Chapter applies in relation to a benefit payable by virtue of

 

a pension credit right, then—

 

(a)    

if entitlement to the relevant pension credit arose before the

 

2014 Act commencement date, the benefit is to be treated for

 

the purposes of sections 84(1) and 84B(1) as attributable to

 

pensionable service before that date;

 

(b)    

if entitlement to the relevant pension credit arose on or after

 

the 2014 Act commencement date, the benefit is to be treated

 

for the purposes of sections 84(1) and 84B(1) as attributable

 

to pensionable service on or after that date.”

 

Member’s explanatory statement

 

For occupational schemes the new revaluation rules in Schedule 2 depend on when the member’s

 

pensionable service took place. For benefits derived from pension sharing on divorce, this

 

amendment will mean that the revaluation rules depend on when the pension was shared rather

 

than when the pensionable service took place.

 

Steve Webb

 

Schedule  2,  page  26,  line  40,  at end insert—

 

“( )    

A benefit of the kind mentioned in section 83(1)(a) that is a collective benefit

 

must be revalued using the default method.”

 

Member’s explanatory statement

 

This amendment means that the default method is to be used when revaluing a collective benefit.

 

Steve Webb

 

Schedule  2,  page  26,  line  41,  after “section 83(1)(a)” insert “that is not a collective

 

benefit”

 

Member’s explanatory statement

 

This amendment means that a collective benefit can only be revalued by the default method. It is

 

consequential on amendment 37.


 
 

Public Bill Committee:                               

150

 

, continued

 
 

Steve Webb

 

Schedule  2,  page  26,  line  42,  after “with” insert “the following provisions of”

 

Member’s explanatory statement

 

This is consequential on amendment 37. It does not alter the meaning.

 

Steve Webb

 

Schedule  3,  page  31,  line  15,  at end insert—

 

    “( )  

In subsection (2A)—

 

(a)    

in paragraph (a), after sub-paragraph (ix) insert—

 

“(x)    

regulations made under Part 3 of the Pension

 

Schemes Act 2014;”;

 

(b)    

in paragraph (b), after sub-paragraph (vii) insert—

 

“(viii)    

regulations made under section (Regulations under

 

Part 3: overriding requirements) of the Pension

 

Schemes Act 2014.””

 

Member’s explanatory statement

 

This inserts additional references into the definition of “relevant legislative provision” in section

 

94 of the Pension Schemes Act 1993 and is consequential on NC11.

 

Steve Webb

 

Schedule  3,  page  32,  line  29,  at end insert—

 

“Pension credits: transfer values

 

10         

Chapter 2 of Part 4A of the Pension Schemes Act 1993 (pension credit benefit:

 

transfer values) is amended as follows.

 

11         

In section 101F (power to give transfer notice), in subsection (4)(a), for “salary

 

related occupational pension scheme” substitute “scheme to which section

 

101H applies”.

 

12         

In section 101G (restrictions on power to give transfer notice), in subsection

 

(1), for “salary related occupational pension scheme” substitute “scheme to

 

which section 101H applies”.

 

13  (1)  

Section 101H (salary related schemes: statements of entitlement) is amended

 

as follows.

 

      (2)  

For subsection (1) substitute—

 

“(1)    

This section applies to a qualifying scheme that is—

 

(a)    

a defined benefits scheme,

 

(b)    

a shared risk scheme, or

 

(c)    

a defined contributions scheme that is not a scheme under

 

which all the benefits that may be provided are money

 

purchase benefits,

 

    

other than a scheme that falls within a prescribed class.

 

(1A)    

The trustees or managers of a scheme to which this section applies

 

must, on the application of any eligible member, provide the member

 

with a written statement of the amount of the cash equivalent of the

 

member’s pension credit benefit under the scheme.”


 
 

Public Bill Committee:                               

151

 

, continued

 
 

      (3)  

In subsections (2) and (3), for “(1)” substitute “(1A)”.

 

      (4)  

In subsection (4)—

 

(a)    

for “to whom subsection (1)” substitute “of a scheme to which this

 

section”;

 

(b)    

for “that subsection” substitute “subsection (1A)”.

 

      (5)  

In the heading, for “Salary related schemes” substitute “Schemes with a

 

promise or target”.

 

14  (1)  

Section 101J (time for compliance with transfer notice) is amended as follows.

 

      (2)  

In subsection (1), for paragraphs (a) and (b) substitute—

 

“(a)    

in the case of a scheme to which section 101H applies, within

 

6 months of the valuation date, and

 

(b)    

in the case of any other scheme, within 6 months of the date

 

on which the notice is given.”

 

      (3)  

For subsection (7) substitute—

 

“(7)    

In subsection (1)(a), “valuation date” means the date by reference to

 

which the amount shown in the relevant statement under section 101H

 

is determined.”

 

15  (1)  

Section 101P (interpretation) is amended as follows.

 

      (2)  

Omit subsection (2).

 

      (3)  

In subsection (3), for “salary related occupational pension scheme” substitute

 

“scheme to which that section applies”.”

 

Member’s explanatory statement

 

Schedule 3 to the Bill makes changes to the general rules about transfers from one pension scheme

 

to another (for reasons related to the new definitions in Part 1). This amendment makes similar

 

changes for cases where benefits are derived from pension sharing on divorce.

 

Steve Webb

 

Clause  18,  page  8,  line  35,  at end insert—

 

“( )    

In section 67 (the subsisting rights provisions)—

 

(a)    

in subsection (3), omit paragraph (b) and the “or” before it;

 

(b)    

after subsection (3) insert—

 

“(3A)    

Regulations may provide for cases in which the subsisting rights

 

provisions do not apply.””

 

Member’s explanatory statement

 

This amendment relates to the subsisting rights provisions. The amendment replaces the existing

 

regulation making power with a broader power to provide for cases in which the subsisting rights

 

provisions do not apply, so for example, in relation to collective benefits.

 

Steve Webb

 

Clause  18,  page  9,  line  3,  at end insert—

 

“(ab)    

on taking effect would or might result in any subsisting right of

 

a member of the scheme which is a right to retirement income in

 

respect of which there is a pensions promise becoming, or being

 

replaced with, a right to benefits other than retirement income,


 
 

Public Bill Committee:                               

152

 

, continued

 
 

(ac)    

on taking effect would or might result in any subsisting right

 

of—

 

(i)    

a member of the scheme, or

 

(ii)    

a survivor of a member of the scheme,

 

    

being replaced with a right or entitlement to collective benefits

 

under the scheme rules,”.”

 

Member’s explanatory statement

 

The amendment relates to the subsisting rights provisions so that any proposal to modify a scheme

 

which would or might replace a right to income with a right to a non-income benefit would be a

 

protected modification. The text in (ab) is taken from paragraph 3(2) of Schedule 4 to the Bill,

 

which is left out by amendment 40.

 

Steve Webb

 

Clause  18,  page  9,  line  3,  at end insert—

 

“( )    

In subsection (3)(b) of that section, after “rules” insert “, other than a pension that

 

is a collective benefit”.”

 

Member’s explanatory statement

 

This text is taken from paragraph 3(3) of Schedule 4 to the Bill, which is left out by amendment 40.

 

The effect is unchanged.

 

Steve Webb

 

Clause  18,  page  9,  line  4,  after “(aa)” insert “, (ab), (ac)”

 

Member’s explanatory statement

 

This is consequential on amendment 13.

 

Steve Webb

 

Clause  18,  page  9,  line  4,  at end insert—

 

“( )    

In subsection (9)—

 

(a)    

in paragraph (a), after sub-paragraph (vii) insert—

 

“(viii)    

regulations made under Part 3 of the Pension Schemes

 

Act 2014;”;

 

(b)    

in paragraph (b), after sub-paragraph (v) insert—

 

“(vi)    

regulations made under section (Regulations under Part

 

3: overriding requirements) of the Pension Schemes Act

 

2014.””

 

Member’s explanatory statement

 

This inserts additional references into the definition of “relevant legislative provision” in section

 

67A of the Pensions Act 1995 and is consequential on NC11.

 

Steve Webb

 

Clause  18,  page  9,  line  5,  leave out “place” and insert “places”

 

Member’s explanatory statement

 

This paves the way for amendment 17.


 
 

Public Bill Committee:                               

153

 

, continued

 
 

Steve Webb

 

Clause  18,  page  9,  line  8,  at end insert—

 

“““retirement income” has the meaning given by section 7 of the Pension

 

Schemes Act 2014;”.”

 

Member’s explanatory statement

 

This defines “retirement income”, which is used in amendment 13.

 

Steve Webb

 

That clauses 9 to 18 be transferred to the end of line 6 on page 15

 

Member’s explanatory statement

 

The Bill needs restructuring in light of the proposed Government amendments. There are a number

 

of motions to transfer provisions around. Collectively they are designed to move Part 2 of the Bill

 

to after Part 3 and to move clause 8 and Schedule 1 to the end of what is currently Part 2.

 

Steve Webb

 

Clause  20,  page  9,  line  32,  leave out “is equal to or higher than a level of

 

probability” and insert “falls within a range”

 

Member’s explanatory statement

 

This amendment and amendments 46, 51, 52 and 53 replace references to a required probability

 

level with references to a specified range. Here, clause 20(2)(c) is amended so that regulations

 

may require initial targets in relation to collective benefits to be set at a level which ensures that

 

the probability of meeting the targets falls within a specified range.

 

Steve Webb

 

Clause  22,  page  10,  line  28,  leave out “The regulations” and insert “Regulations

 

under subsection (1)”

 

Member’s explanatory statement

 

This is intended to clarify that in clause 22(3) the reference to “The regulations” is to regulations

 

under subsection (1).

 

Steve Webb

 

Page  11,  line  6,  leave out Clause 24

 

Member’s explanatory statement

 

The material currently in clause 24 is replaced by NC7.


 
 

Public Bill Committee:                               

154

 

, continued

 
 

Steve Webb

 

Clause  26,  page  11,  line  37,  leave out “is equal to or higher or lower than the

 

required probability” and insert “falls within the required range or is above or below it”

 

Member’s explanatory statement

 

This amendment follows the approach taken in clause 20. It amends one of the powers in clause

 

26 so that regulations may require an actuary to certify that the probability of a scheme meeting

 

targets in relation to collective benefits falls within, above or below a specified range of

 

probabilities.

 

Steve Webb

 

Clause  27,  page  12,  line  5,  leave out “The regulations” and insert “Regulations

 

under subsection (1)”

 

Member’s explanatory statement

 

This amendment is related to amendment 48. The effect is unchanged.

 

Steve Webb

 

Clause  27,  page  12,  line  9,  at end insert—

 

“( )    

Regulations may—

 

(a)    

make provision about the assets to be taken into account for the purposes

 

of a valuation report;

 

(b)    

require the value attributed to the assets to be reduced by the amount of

 

any liabilities in respect of administrative expenses or other specified

 

matters.”

 

Member’s explanatory statement

 

This amendment inserts a regulation-making power to make provision as to which assets should

 

be taken into account for the purposes of a valuation report. This amendment also provides that

 

the regulations may require the value of the assets to be reduced by the amount of any liabilities

 

in respect of administrative expenses or other matters specified in regulations.

 

Steve Webb

 

Clause  27,  page  12,  line  10,  leave out “The regulations” and insert “Regulations”

 

Member’s explanatory statement

 

This amendment is consequential on amendment 48. The effect is unchanged.

 

Steve Webb

 

Clause  27,  page  12,  line  11,  leave out “methods or assumptions determined in

 

accordance with the regulations” and insert “specified requirements imposed by

 

regulations under this section”

 

Member’s explanatory statement

 

This amendment takes account of amendment 48 and provides that regulations may require an

 

actuary preparing a valuation report to certify that specified requirements imposed by regulations

 

under clause 27 have been followed.


 
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